President Donald Trump’s pick of Kevin Warsh to lead the Federal Reserve shifts the focus to the Senate, where confirmation could be delayed by Republican opposition linked to a criminal probe of Fed Chair Jerome Powell.
Warsh would succeed Powell, whose term expires in May, but must first be confirmed by a simple majority in the Senate, a process that typically begins with a hearing and vote in the Senate Banking Committee.
Sen. Thom Tillis R-N.C., doubled down Friday, saying he will oppose the confirmation of any Federal Reserve nominee until the Trump administration concludes its criminal probe of Powell. Tillis’s resistance carries particular weight given his seat on the Senate Banking Committee.
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“Kevin Warsh is a qualified nominee with a deep understanding of monetary policy. However, the Department of Justice continues to pursue a criminal investigation into Chairman Jerome Powell based on committee testimony that no reasonable person could construe as possessing criminal intent,” Tillis wrote in a post on X.
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“Protecting the independence of the Federal Reserve from political interference or legal intimidation is non-negotiable,” Tillis added.
With Tillis placing a hold on Warsh’s nomination, the only way to force it out of the Senate Banking Committee would be through a discharge vote on the Senate floor, a move that requires 60 votes and is unlikely in a deeply divided Senate, particularly amid tensions over the investigation into Powell.
Trump told reporters at the White House that Tillis would be out of office soon since the Republican senator was not running for re-election. Trump also called Tillis an “obstructionist” but added that he’s always liked him.
“If he doesn’t approve, we’ll just have to wait till somebody comes in that will approve it, right? So that’s it,” Trump added.
What’s more, his potential ascension to lead the world’s most powerful central bank comes during a period of unusual strain.
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What began as tension over interest rate policy has now spiraled into a full-blown confrontation, marking the most challenging moment of Powell’s eight-year leadership of the Federal Reserve.
On Jan. 11, Powell confirmed that the Justice Department had opened a criminal investigation into his congressional testimony related to the renovation of the Federal Reserve’s two historic main buildings on Washington, D.C.’s National Mall.
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Powell called the move “unprecedented” in a video statement and another example of what he described as Trump’s ongoing threats lobbed at the central bank. His decision to respond so publicly, after days of private consultation with advisers, marked a sharp departure from his typically measured approach.
On Wednesday, Powell, who addressed journalists for the first time since the opening of the criminal probe, said his advice for the next Fed chair would be to stay out of elected politics. He also reiterated the importance of an independent central bank.
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Powell, widely viewed as one of the most crisis-tested Federal Reserve chairs in modern U.S. history, built his career as a lawyer and investment banker in New York before entering public service in the administration of President George H.W. Bush.
He joined the Federal Reserve’s Board of Governors in 2012 and was nominated by Trump to lead the central bank in 2017.
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